Why isn't the "Economic Recovery" increasing workers' pay?

[dismal]

Huh, on page 6 of a thread about slow wage growth and not one mention of legal/illegal immigration or Zuckerberg visas.

Why talk about that when it's so obvious there's only one single employer that everyone must work for that's keeping wages down (versus what wages would be in some other imaginary world)?

 

[coloradoatheist]

The AMA certainly isn't a union.

"American Medical Association: the strongest trade union in the USA"

http://www.aei.org/publication/american-medical-association-the-strongest-trade-union-in-the-u-s-a/


And that was only what I just pulled easily off google. I can still remember in economics class I took in college (during the 1980's) my professor used the AMA as the reference text book example of a trade union. Because the AMA purposely limits the supply of labor in order to raise doctor wages.

And what has our health care been described as, overly costly and underperforming. The definition of an union.

 

[untermensche]

And what has our health care been described as, overly costly and underperforming. The definition of an union.

That is the result of corporate for-profit health insurance.

That is why it is costly and causing the best heath care system in the world to underperform.

Every cent taken out in the form of profit is total waste. It is a cent not going to health care.

We have a great health care system with well trained physicians and good hospitals.

And a third world primitive health insurance system.

 

[coloradoatheist]

And what has our health care been described as, overly costly and underperforming. The definition of an union.

That is the result of corporate for-profit health insurance.

That is why it is costly and causing the best heath care system in the world to underperform.

Every cent taken out in the form of profit is total waste. It is a cent not going to health care.

We have a great health care system with well trained physicians and good hospitals.

And a third world primitive health insurance system.

Both are contributing heavily to the high costs we have for health care. And to drastically reduce costs we're going to have to tell the medical personal to take drastic pay cuts.

 

[untermensche]

And what has our health care been described as, overly costly and underperforming. The definition of an union.

That is the result of corporate for-profit health insurance.

That is why it is costly and causing the best heath care system in the world to underperform.

Every cent taken out in the form of profit is total waste. It is a cent not going to health care.

We have a great health care system with well trained physicians and good hospitals.

And a third world primitive health insurance system.

Both are contributing heavily to the high costs we have for health care. And to drastically reduce costs we're going to have to tell the medical personal to take drastic pay cuts.

Unions are not a problem.

The more more unions get for workers the stronger the economy.

The problem is for-profit health insurance.

An inefficient dinosaur.

 

[coloradoatheist]

Both are contributing heavily to the high costs we have for health care. And to drastically reduce costs we're going to have to tell the medical personal to take drastic pay cuts.

Unions are not a problem.

The more more unions get for workers the stronger the economy.

The problem is for-profit health insurance.

An inefficient dinosaur.

Thanks for the laugh. The problem isn't the for profit by itself, it's the model that we use to pre purchase health care is a problem too. But it's both that drive health care costs and you can look at that when you compare the costs of procedures between different systems and we pay a lot more for everything.

 

[Playball40]

Nonsense. Do you think medical personnel in other countries make bupkis? Some may make less, but net more due to the fact they don't have outrageous student loans or malpractice premiums.

And what has our health care been described as, overly costly and underperforming. The definition of an union.

That is the result of corporate for-profit health insurance.

That is why it is costly and causing the best heath care system in the world to underperform.

Every cent taken out in the form of profit is total waste. It is a cent not going to health care.

We have a great health care system with well trained physicians and good hospitals.

And a third world primitive health insurance system.

Both are contributing heavily to the high costs we have for health care. And to drastically reduce costs we're going to have to tell the medical personal to take drastic pay cuts.

 

[dismal]

Nonsense. Do you think medical personnel in other countries make bupkis?

I'd assume they'd make lots more. Without the big monopsony hirer we have here and such.

 

[laughing dog]

Not if you fail to renew a lease on office space those 20 employees were using. Companies expand and downsize office space all the time when their employee count rises and falls.

They certainly don't do it immediately. Nor do they do it with small changes. Nor does an office serve solely to help employees work.

Your argument basically amounts to the costs not perfectly tracking with changes in the number of workers.

No, it does not. It distinguishes between fixed costs and variable costs.

I suppose you don't consider being shot to be hazardous because there's nothing like a perfect tracking between being shot and being killed. (Most deaths are not from being shot, most people who are shot don't die from it.)

You suppose wrong.

 

[coloradoatheist]

Your argument basically amounts to the costs not perfectly tracking with changes in the number of workers.

No, it does not. It distinguishes between fixed costs and variable costs.

I suppose you don't consider being shot to be hazardous because there's nothing like a perfect tracking between being shot and being killed. (Most deaths are not from being shot, most people who are shot don't die from it.)

You suppose wrong.

What you are having a tough time with is when those fixed costs actually need to be allocated back so what those costs are actually doing is understood in the terms of the person or thing doing them. Fixed costs are important and you need to understand them to correctly understand the underlying P&L.

 

[laughing dog]

No, it does not. It distinguishes between fixed costs and variable costs.
You suppose wrong.

What you are having a tough time with is when those fixed costs actually need to be allocated back so what those costs are actually doing is understood in the terms of the person or thing doing them. Fixed costs are important and you need to understand them to correctly understand the underlying P&L.

I agree. Meaningless averages are not the way to do that - which is what you are promoting.

I am very familiar with the pointlessness of what you are promoting. I have seen how it has inhibited rational decision-making. For example, I knew a salesman who had been trying to get permission to get another salesman to help with his customers. He could show they were losing out on sales - no dispute from his higher ups. However, they would not authorize another salesman because the alleged allocated costs of office space and other fixed costs made this position cost-inefficient. I asked this salesman if these allocated fixed costs were lowered with the addition of the position, and he said no - even though the fixed costs did not change in total. When he went back and showed this to his bosses, it took him over 2 months to convince them that the new position would actually be profitable. His firm lost 2 months of profit because of their kneejerk adherence to pointless averages.

 

[bilby]

Worker's skills can be divided into two categories - skills that are general, and could be used by any employer in the same field; And skills that are specific, and apply ONLY to their current employer. It is these latter skills that are the reason why a guy with a few years of experience on the job is more effective than a new hire, no matter how qualified or experienced that new guy might be.

I was with my previous employer for over ten years, in a variety of positions as I moved up through the company, and by the time I left, I had an encyclopaedic knowledge of the fine details of the way the company worked - from a knowledge of who worked in what departments, and who would actually be willing and able to answer a given question, who would be able but unwilling, and who would be willing but unable; Through to an ability to instantly know which generic product names mapped to which of our (several hundred) finished product codes, product tradenames, and/or major competitor brandnames. All of that knowledge was of great value to that company, but of no value to any other potential employer - the few direct competitors who might have found some of it useful I was forbidden from working for by non-compete clauses in my contract.

Employers are in a monopsony position as regards this kind of institutional knowledge (dismal's ignorance-based faux-incredulity notwithstanding), and many employees have few documented skills that they can effectively use to sell themselves to a different employer. When only your current employer knows your true worth, and only your current employer is able to leverage a sizable fraction of your accumulated experience and skills, moving between employers is bad for everyone involved. The employer you leave loses your valuable institutional knowledge, and must pay your replacement to do a less effective job while he acquires this; You lose the value of those employer specific skills, and have to start again at the bottom; And overall productivity drops as a result of both factors.

General skills that can be used by any employer (or any employer in a specific field) are less impacted by this, but even there, incumbency counts - if you have been working with a particular company for a while, they know not only that you have a degree in applied whatever-they-do-for-a-business-ology; But also how competently you perform tasks related to that supposed knowledge. Two applicants with identical paper qualifications might have widely differing skill levels - some people get a degree as a result of their fascination with the subject matter, and others get a degree so that they can find work, and forget as much of their learning as possible the day after the final exam. Those most valuable employees who fall into the former group can never effectively demonstrate that level of value to anyone other than their current employer, and so are at a disadvantage in the job market, in that they have greater value, but appear to be equal to everyone else. They can only leverage their actual value by remaining with their current employer. If that's not another form of monopsony - having a product that you can only sell to one buyer - then what is it?

 

[untermensche]

Both are contributing heavily to the high costs we have for health care. And to drastically reduce costs we're going to have to tell the medical personal to take drastic pay cuts.

Unions are not a problem.

The more more unions get for workers the stronger the economy.

The problem is for-profit health insurance.

An inefficient dinosaur.

Thanks for the laugh. The problem isn't the for profit by itself, it's the model that we use to pre purchase health care is a problem too. But it's both that drive health care costs and you can look at that when you compare the costs of procedures between different systems and we pay a lot more for everything.

We have two systems.

A very inefficient and bloated for-profit system.

And a more efficient government run program that could be more efficient.

But the deadwood for-profit system makes the whole thing very inefficient.

 

[Loren Pechtel]

The AMA certainly isn't a union.

"American Medical Association: the strongest trade union in the USA"

http://www.aei.org/publication/american-medical-association-the-strongest-trade-union-in-the-u-s-a/


And that was only what I just pulled easily off google. I can still remember in economics class I took in college (during the 1980's) my professor used the AMA as the reference text book example of a trade union. Because the AMA purposely limits the supply of labor in order to raise doctor wages.

AEI is very anti-worker. The opinions mean little, although their data seems ok.

 

[Loren Pechtel]

No. My wife had a tough test to get a license and must remain in good standing with the licensing board--but said board has absolutely no interest in her financial arrangements other than if they were contrary to the law. They provide absolutely no assistance in obtaining better working conditions or higher pay.

The fact they make you get a license is a barrier to entry in and of itself. Fewer people able to show a license drives up wages (supply vs demand).

But there's no limit on the number of licenses. It's simply a test of whether you are qualified--something I have no problem with when it's a profession where the average customer has little ability to evaluate competence and where doing it wrong can cause a serious problem.

Where I do have a problem is with overly-broad licenses. For example, cosmetology licenses for people doing simple hair manipulation things. (Braids, cornrows etc.) (Note: Even the medical community has this problem. In practice psychiatry is psychology + pharmacology. However, they get the full medical training but their psychological training is less than what a psychologist gets.)

 

[untermensche]

But there's no limit on the number of licenses.

The number of graduating students is controlled and the number of people with licenses emigrating is controlled.

The control of the number of licenses does drive up the pay of highly trained workers like physicians. They are somewhat rare, and kept that way, and in constant demand.

Just having licenses does not increase pay but controlling the number of licenses does.

 

[Loren Pechtel]

Thanks for the laugh. The problem isn't the for profit by itself, it's the model that we use to pre purchase health care is a problem too. But it's both that drive health care costs and you can look at that when you compare the costs of procedures between different systems and we pay a lot more for everything.

We have two systems.

A very inefficient and bloated for-profit system.

And a more efficient government run program that could be more efficient.

But the deadwood for-profit system makes the whole thing very inefficient.

Sorry, but there's tons of inefficiency in the government system.

You simply look at the low expense ratio and proclaim it efficient. That's the wrong yardstick. Medicare is the system I see so it's what I'm addressing:

1) There are tons of "quality" metrics that are one-size-fits-all. The docs are more focused on checking the boxes than the patient.

2) The gatekeeper system means visits solely for the purpose of getting a referral--and often involving duplicated effort. Now, in general the gatekeeper system is good but it shouldn't require continual reauthorization for ongoing treatment or monitoring by a specialist.

3) The HMO system hides most of the paperwork from the consumer (to some extent I actually think this is bad for the system--when I look at the medical summary for my wife it is missing most things because they are in-house) but it doesn't get rid of it, it's going on behind the scenes and still focused on look for a reason to deny rather than try to find the right answer.

4) Even in a salary system people are incentivized to provide more treatment than needed--they have to have enough patients to justify their jobs.

 

[untermensche]

1) There are tons of "quality" metrics that are one-size-fits-all. The docs are more focused on checking the boxes than the patient.

How many doctors do you know?

How many have you spoken with to form this opinion?

Doctors are pulled in many directions but they have standards of care and they work to make diagnoses despite interference from insurance companies.

2) The gatekeeper system means visits solely for the purpose of getting a referral--and often involving duplicated effort. Now, in general the gatekeeper system is good but it shouldn't require continual reauthorization for ongoing treatment or monitoring by a specialist.

There is the other inefficiency you somehow don't see.

The people that waste the time of specialists with things that could be handled by a PCP.

It is a balancing act. Many people do know when they need to see a specialist but many don't have a clue.

3) The HMO system hides most of the paperwork from the consumer (to some extent I actually think this is bad for the system--when I look at the medical summary for my wife it is missing most things because they are in-house) but it doesn't get rid of it, it's going on behind the scenes and still focused on look for a reason to deny rather than try to find the right answer.

What this is supposed to be criticizing about Medicare I don't know. But Medicare is not the HMO system. The HMO system is part of the problem. The for-profit system is a huge problem.

4) Even in a salary system people are incentivized to provide more treatment than needed--they have to have enough patients to justify their jobs.

Few get more treatment than needed.

Sometimes more tests and procedures are done than are needed to cover physicians from law suits.

 

[coloradoatheist]

No, it does not. It distinguishes between fixed costs and variable costs.
You suppose wrong.

What you are having a tough time with is when those fixed costs actually need to be allocated back so what those costs are actually doing is understood in the terms of the person or thing doing them. Fixed costs are important and you need to understand them to correctly understand the underlying P&L.

I agree. Meaningless averages are not the way to do that - which is what you are promoting.

I am very familiar with the pointlessness of what you are promoting. I have seen how it has inhibited rational decision-making. For example, I knew a salesman who had been trying to get permission to get another salesman to help with his customers. He could show they were losing out on sales - no dispute from his higher ups. However, they would not authorize another salesman because the alleged allocated costs of office space and other fixed costs made this position cost-inefficient. I asked this salesman if these allocated fixed costs were lowered with the addition of the position, and he said no - even though the fixed costs did not change in total. When he went back and showed this to his bosses, it took him over 2 months to convince them that the new position would actually be profitable. His firm lost 2 months of profit because of their kneejerk adherence to pointless averages.

I agree with you about meaningless averages, but that's if the averages don't represent what is actually going on with the cost. But the allocating the overhead costs to what uses it is necessary. And for office space, the space used does cost, and each person using the space uses that space and incurs cost. Unless you want to make the argument that office space isn't charged based on the size of the space......But it's not up to us to determine what the appropriate allocation of overhead costs are, the business has to do that. The argument though where you take lost sales minus pay of employee and say if that is greater than 0 then the employee is underpaying the employee is bogus.

 

[bilby]

I agree. Meaningless averages are not the way to do that - which is what you are promoting.

I am very familiar with the pointlessness of what you are promoting. I have seen how it has inhibited rational decision-making. For example, I knew a salesman who had been trying to get permission to get another salesman to help with his customers. He could show they were losing out on sales - no dispute from his higher ups. However, they would not authorize another salesman because the alleged allocated costs of office space and other fixed costs made this position cost-inefficient. I asked this salesman if these allocated fixed costs were lowered with the addition of the position, and he said no - even though the fixed costs did not change in total. When he went back and showed this to his bosses, it took him over 2 months to convince them that the new position would actually be profitable. His firm lost 2 months of profit because of their kneejerk adherence to pointless averages.

I agree with you about meaningless averages, but that's if the averages don't represent what is actually going on with the cost. But the allocating the overhead costs to what uses it is necessary. And for office space, the space used does cost, and each person using the space uses that space and incurs cost. Unless you want to make the argument that office space isn't charged based on the size of the space......But it's not up to us to determine what the appropriate allocation of overhead costs are, the business has to do that. The argument though where you take lost sales minus pay of employee and say if that is greater than 0 then the employee is underpaying the employee is bogus.

Allocating the cost via the employee is bad accounting. The cost must ultimately flow through to the product, but it's not useful to allocate it per employee; far better to simply allocate it to the product range directly.

Having run an Activity Based Costing project for a manufacturing plant, in association with our site accountant, I can assure you that misallocating cost via headcount would be a mistake in almost all situations.